MANILA, Philippines – Reflecting the strong investor confidence in the Philippines, net foreign direct investment (FDI) inflows jumped 60 percent in November, boosting the 11-month performance to exceed the full-year target.
The Bangko Sentral ng Pilipinas (BSP) said FDI inflows amounted to $756 million in November last year, $282 million higher than the previous year’s $474 million.
From January to November last year, the inflow of direct investments went up by more than 25 percent to $6.97 billion, exceeding the full year target of $6.7 billion.
Net FDI inflows have declined for six straight months after surging 482.8 percent to $2.24 billion in April from $385 million in the same month in 2015 with the infusion of P37 billion by the Bank of Tokyo – Mitsubishi UFJ Ltd in exchange for a 20 percent stake in Security Bank Corp.
Data showed equity placements jumped nearly 78 percent to $437 million from $246 million while withdrawals soared by a dramatic 2,780 percent to $283 million from $10 million.
This translated to a 34.7 percent decline in net equity capital investments to $154 million in November last year from $236 million in November 2015.
Equity capital infusion came mostly from Hong Kong, the US, Taiwan, Germany, and Czech Republic. The funds were invested mainly in arts, entertainment and recreation; financial and insurance; real estate; wholesale and retail trade; and professional, scientific and technical activities.
Net FDI during the month in review was in the form of debt instruments or intercompany borrowings amounting to $544 million, about three times the $185 million recorded in November 2015. Reinvestment of earnings grew 9.5 percent to $58 million.
Equity placements slipped 7.3 percent to $2.38 billion while withdrawals fell 31 percent to $555 million.
“The continued inflows of foreign direct investment were buoyed by strong investor confidence in the economy on the back of sound macroeconomic fundamentals and sustained growth potential,” the BSP said.
The bulk of equity capital placements from January to November last year came largely from Japan, Hong Kong, Singapore, the US, and Taiwan.
Net availment of debt instruments increased 44.4 percent to $4.5 billion from $3.1 billion. In addition, net equitycapital investment grew by 3.4 percent to $1.8 billion.
Reinvestment of earnings reached $663 million in the first 11 months of last year.
The central bank sees FDI inflows improving to $7 billion this year as the Duterte administration committed to ramp up infrastructure spending to five percent of GDP.
Global financial markets remained volatile amid the normalization of interest rates by the US Federal Reserve wherein the US central bank raised benchmark rates by 25 basis points last December.
11 February 2017
By Lawrence Agcaoili
